Option Adjusted Spread

f. differentiate between the nominal spread, the zero-volatility spread, and the
option-adjusted spread;




If a bond has embedded options, its Option-adjusted spread (OAS) is the spread at which it presumably would be trading over a benchmark if it had no embedded optionality. More precisely, it is the instrument's current spread over the benchmark minus that component of the spread that is attributable to the cost of the embedded options:


OAS = spread - spread due to option

For more see
http://www.riskglossary.com/link/option_adjusted_spread.htm